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Repayment Assistance Plan (RAP) Explained: Eligibility, Payment Calculation, Subsidies, and Who Should Use It
The episode breaks down the forthcoming Repayment Assistance Plan (RAP)! We dig into all the details ranging from who's eligible for RAP, to how Discretionary Income and protected income are thrown out the window when it comes to calculating payments. We cover scenarios where RAP saves money as compared to other options, and how to determine whether it's worth paying 5 to 10 years longer on RAP as compared to more conventional plans like IBR and PAYE.
Check it out!
00:00 RAP Overview
02:00 New IDR Deadlines
03:35 Guide Walkthrough
04:05 Eligibility Basics
04:35 No Protected Income
06:02 Payment Formula
08:00 Income Cliffs
09:24 Dependent Discount
09:57 No Hardship Cap
11:17 Interest Subsidy
15:08 30 Year Forgiveness
15:48 Married Filing Separately
16:27 Who Should Use RAP
17:39 Low Income Example
19:20 High Income Example
21:53 Mega Borrower Tax Bomb
27:27 Final Recommendations
28:10 Wrap Up
